German Utility Revolts Against Renewable Energy, Threatens To Relocate In Turkey

E.ON, Germany's largest gas, electric and water utilities, has threatened to relocate to Turkey if the continues to prevent the profitability of its nuclear and fossil-fired power plants, according to AFP reports.

In the wake of the Fukushima crisis, Chancellor Angela Merkel pledged to phase-out nuclear power in Germany by the end of the decade and fill the resulting gap in power supply by generating up to 80% of the nation's electricity from renewable energy by 2050.

Under current regulations, electricity generated by renewable energy resources are given priority access to the grid. As a result, electricity generated by coal and gas-fired plants is only used "to make up for any shortfalls," according to the AFP.

Many power plants in E.ON's fleet are thus operating at a loss, which has taken a steep financial toll.

In the second quarter, E.ON saw its net profit plunge by 22% as the result of weak demand and strong subsidies for renewable energy.

Meanwhile, RWE, Germany's second-largest utility, said last week that it would shut down six power plants, which collectively represent about 4,300 megawatts of capacity, in Germany and the Netherlands.

Following the boom of solar power in recent years, nourished by generous subsidies, the capacity of renewable sources of energy is such that, if the wind is blowing and the sun is shining, Germany can actually do without its conventional power plants.

In the period from April to June, a number of RWE's plants were operating at less than 10 percent of capacity, said finance chief Guenther.

And with wholesale electricity prices at the current lows in Europe, that means substantial losses. That was the case with gas-fired plants until recently, but coal-fired generators are now barely profitable as well, he said.

. . . At the moment, E.ON's plants 'are working for nothing,' raged chief executive Johannes Teyssen last week, who is eyeing other closure scenarios and a possible relocation to Turkey where the group already has a solid presence.